Buying a home can be a rewarding life experience, as well as a great investment. But having a successful purchase requires some education and research. For first time homebuyers especially, you'll save yourself a lot of frustration--and maybe even money--if you start with a few simple steps.

Summary Points

1.

Be honest about your housing needs, and find a real estate agent to guide you through the process.

2.

Assess your finances and meet with several lenders to find the right loan.

3.

Research neighborhoods carefully, and make sure to have the house professionally inspected.

4.

Use contingencies as a negotiation tool, and don't forget to budget for closing costs.

Know What You Need

The first step is being honest about your needs versus your wants. For example, you may dream of having a big backyard for gardening. But if you have a busy schedule, a low-maintenance townhouse probably makes more sense. You also have to think about the long term. Will the house still meet your needs--or your family's needs--5 years from now?

Find a Real Estate Agent

A real estate agent can pre-qualify you for a loan, answer questions about neighborhoods, recommend lenders and even coordinate the closing--all while saving you time and money. To find the right agent, look for someone who makes you feel comfortable and listens to your needs. You also want to find a professional who knows the community and current market. Top agents, like those who advertise in Homes & Land Magazine, are great resources for information about their area.

Crunch the Numbers

It's extremely important to have a clear idea of your financial situation before you start looking for a home. Not only will this help you set a budget, but financial records will come in handy when you start shopping for a loan. Make sure to talk with several lenders before making a decision. While interest rates and closing costs are important considerations, you also want your lender to explain things in a way you can understand and make time for your questions.

Compare Neighborhoods

Focus on areas that meet your needs, budget and personal taste. Factors to pay special attention to include convenient access to transportation, employment, schools and stores. The right neighborhood should also make you feel safe, offer recreational opportunities, and have adequate police and fire protection. To help find your ideal location, consult with your real estate agent and try speaking with residents in the neighborhood to learn more information.

Inspect Houses Carefully

During any house showing, be alert for signs of structural weakness, water damage, pest infestations or other things that just don't "look" right. Conversely, don't overlook an otherwise suitable home just because it has cosmetic problems like outdated carpet or a bad paint job. Most importantly, never purchase a home without first having it thoroughly examined by a professional home inspector.

10 Home Buying Mistakes You Should Avoid

Working with an agent who is unfamiliar with the area, or thinking that you don't need to have an agent

Making an offer without having a clear idea of your budget

Not shopping around for the right loan

Failing to research the neighborhood beforehand

Buying a house based on its size, rather than how well it fits your needs

Overlooking a good home simply because of cosmetic problems

Not having a home professionally inspected

Thinking that price is the only bargaining chip

Not reading the fine print on the purchase contract.

Not budgeting enough money for closing costs.

Negotiation and Contingencies

Don't rely on price as your sole bargaining chip. Contingencies may be written into the contract to specify how certain aspects of the transaction will be handled--everything from standard contingencies like pest inspections, to contingencies for the seller to leave the drapes or pay the buyer's closing costs. Make sure any verbal agreements are written into the contract and that you read ALL the fine print before signing. If you have questions, consult with your real estate agent or real estate attorney.

The Closing

The closing represents the completion of the sale. Be prepared to sign numerous documents as well as pay funds for loan costs, property taxes, insurance and other fees. Try and get a copy of the documents prior to the close so you can contact the settlement agent or escrow officer if any of the information seems wrong or is unclear.